This invention relates to a method and computerized system for the collection of unpaid insurance receivable accounts. More particularly, it relates to a method and computerized system providing a combination of specific automation enablers and unique rule based decision tools which are used to maximize recovery of past due and/or disputed insurance premium accounts by optimizing key decisions that occur during the transaction life cycle of the insurance receivable accounts.
The insurance service industry expends large amounts of resources, including facilities, equipment and staff, for collecting unpaid insurance premiums. A billing system which referred $107 million of past due premiums for collection included referrals from large and regular accounts making up most of the approximately 57,000 new cases and $65 million of past due premiums referred annually. Premium recovery through direct collection efforts was $38.3 million and charge offs (referrals considered losses) were $22.8 million. Outside legal collection fees were $1.5 million. Over 70 file cabinets were required to store the estimated 1.2 million documents representing active collection cases. A staff of 30 individuals, including 22 collectors and 8 administrative and management personal in support, was maintained to process these collection cases.
A review of the existing collection process revealed that the less time a collector spent in direct contact with a debtor, the greater likelihood a case remained unresolved and the costs to collect increased. The collection process typically consisted of the following steps: a 1st letter requesting payment, a 2nd letter requesting payment, phone calls requesting payment of the debt, a financial background check on the debtor, an asset search, initiation of a suit, pretrial conference, trial, and resolution of the debt. Time and money expenditures increased with a resulting decrease in likelihood of recovery the farther along the collection process progressed through these steps. Lack of automation respecting routine, repetitive collector tasks such as copying, referrals, matching to file, memo generation and retrieving as well as a lack of automated scripted dispute handling, on line payment plan capabilities, electronic data transfer and, collection strategy development took away from the collector's time to spend in direct contact with a debtor.
When the case was referred to an outside collection agency or attorney, the costs to collect dramatically increased and the chances of recovery dramatically decreased. In particular, lack of automation respecting facsimile generations, legal strategy development, in house attorney reviews and monitoring, electronic data transfers to local counsel, evaluation of the next step to be undertaken and, access to a bankruptcy database contributed to dramatic increases in costs to collect and prolonging the case. Consequently, more effective outside referral and litigation management was needed with respect to the steps undertaken by collection agencies and outside attorney's to minimize collection costs.
Prior art fails to teach or suggest the present invention method and computerized system for managing insurance receivable accounts. U.S. Pat. No. 5,444,61 5, entitled "Attorney Terminal Having Outline Preparation Capabilities For Managing Trial Proceeding", issued to Bennett et al concerns attorney terminals having outline capabilities for case evidence, case law and work product for a lawsuit. U.S. Pat. No. 5,136,502, entitled "System For Funding, Analyzing And Managing Health Care Liabilities", issued to Van Remortel et al relates to a system for funding and managing retiree health care benefits. U.S. Pat. No. 5,191,522, entitled "Integrated Group Insurance Information Processing And Reporting System Based Upon An Enterprise-Wide Data Structure", issued to Bosco et al concerns an integrated information processing storage system for processing and supervising a plurality of group insurance accounts. U.S. Pat. No. 4,831,526, entitled "Computerized Insurance Premium Quote Request And Policy Issuance System", issued to Luchs et al concerns a computerized system for processing and preparing applications for insurance and premium quotations and for preparing and writing insurance contracts. Notwithstanding the prior art, there is no suggestion or teaching of the present method and computerized system for managing insurance receivable accounts on through the litigation process.
An object of the present invention is to provide a method and computerized system for managing insurance receivable accounts. More specifically, it is an object to provide a system for substantially automating the work in process management of billing and collection functions for insurance receivable accounts.